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Bounce Back Loans repayment problems

As a general rule however the Insolvency Service has indicated that all insolvency cases where one or more of the coronavirus financial support processes has been used (i.e. BBL/CBILu2019s/Furlough) they will be automatically targeted for additional review.

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Bounce Back Loans repayment problems

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  1. Bounce Back Loans repayment problems If you have taken out a COVID 19 Bounce back loan or other type of COVID 19 funding and are struggling to pay back the loan, you should read the following What are Insolvency Practitioners being asked to do? All Insolvency Practitioners have been asked to familiarise themselves with the terms of BBLs and to review company books and records to verify receipt and disposal of BBL funds. Where concerns are identified or BBL abuse suspected, Insolvency Practitioners should ensure that these are reported under the Director Conduct Reporting Service (DCRS). As a general rule however the Insolvency Service has indicated that all insolvency cases where one or more of the coronavirus financial support processes has been used (i.e. BBL/CBIL’s/Furlough) they will be automatically targeted for additional review.

  2. What areas of potential abuse have been highlighted (this is not an exhaustive list) for Insolvency Practitioners to consider? failure to disclose a BBL in the statement of affairs; minimal creditors, e.g. a BBL and bank overdraft, and/or HMRC; funds not being used for the benefit of the business; where there was no intention after receipt of the BBL to carry on trading or make attempt to repay; businesses not trading in the UK or resident for UK tax; businesses not trading as at 1 March 2020; company dormant, i.e. filing dormant accounts for 2019 and/or 2020; sole traders falsely declaring start date of trading;

  3. businesses overstating turnover by more than 25%, or a loan of more than 25% of turnover; multiple applications to different lenders for a BBL (N.B.: Companies can apply for other Covid support loans such as a Coronavirus Business Interruption loan (CBIL) but must use those funds in part to repay the BBL); knowledge of insolvency prior to application; applications close to, or after, insolvency event, including post-petition or post liquidation; sole traders who were bankrupt, in an IVA or DRO at the date of application. The Insolvency Service The Insolvency Service will review conduct concerns for potential disqualification and bankruptcy restriction action and, where appropriate, refer to the relevant prosecution authority. For More Information Visit Here: Click Here for visit our website: https://finance-equation.co.uk/

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